Time Inc. Exec Sees Rosy Future for Magazines
William Flannery Of the Post-Dispatch, St Louis Post-Dispatch (MO)
Reginald K. Brack Jr. has heard all the doom-and-gloom arguments about the end of magazines and book publishing.
"It was in 1972 that we folded Life as a weekly; the Saturday Evening Post folded; Look folded. And everybody said, `Well, there goes magazines,' " said Brack, the chairman of Time Inc., the publishing arm of Time Warner, the world's largest media and entertainment corporation.
"But only eight years later, Time Inc. had the biggest growth rate in the history of its magazine business."
Brack was interviewed before the recent annual meeting of The Urban League of Metropolitan St. Louis. He is chairman of the League's board of trustees.
During the 1980s, Brack said, "It was going to be Ted Turner's CNN and all-news radio - `Oh, my God, no one is going to read a magazine again!'
"But guess what? Sports Illustrated kicked into high gear; People became the most successful and most profitable magazine in the world; and we had a higher growth rate than even the '70s," Brack said.
Founded in 1922 by Henry Luce, Time Inc. expanded after the press baron's death in 1967 from magazines and books into cable television.
In 1989, Time merged with Warner Inc., the old Warner Brothers movie studio, which itself had expanded into a mass entertainment corporation of movies, music, videos and theme parks.
The merger seemed logical to many, but many others question the $9 billion in corporate debt that was taken on to swing the deal, a debt that Time Warner still carries. Time Warner now has about $9.3 billion in long-term debt. The company had revenue of $13.1 billion last year.
Despite the recession in the early 1990s - which Brack said was the worst in the publishing business since the Great Depression - Time Inc. recently has turned in the best performance of any division at Time Warner.
When he took over Time Inc. in 1986, Brack said, "We had eight magazines; today we have 37 magazines."
Nearly all of the new publications are special-interest magazines.
"They range from Entertainment Weekly . . . to Martha Stewart's Living to Vibe, the magazine for the Generation X, and the Hip-Hop world."
Brack still sees a strong potential in specialty publications, particularly in fashion, health and fitness.
But he stresses that Time's strategy is always to be the biggest in any niche market.
"If we can't be No. 1; we don't want to play," he said.
Financial analysts like Michael Kupinski tend to agree.
"I hate to use these words, but Time Warner is part of the `information superhighway,' " said Kupinski, an analyst at A. …